EC gives conditional approval for Orange's acquisition of Telekom Romania Communications

29 Jul 2021

EU antitrust regulators have given conditional approval, under the EU Merger Regulation, for Orange Group’s acquisition of a 54% controlling stake in fixed operator Telekom Romania Communications (TKR) from Greek telco OTE, part of the Deutsche Telekom group. The deal is conditional on the divestiture of TKR’s 30% minority shareholding in Telekom Romania Mobile Communications (TRMC), which is a direct competitor of Orange’s local subsidiary.

Following its investigation, the EC found ‘the transaction, as initially notified, would have raised serious competition concerns in the market for retail mobile telecommunication services’. In particular, Orange’s minority stake in TRMC would have given it access to commercially sensitive information about its competitor, and allowed it to block important investments by TRMC or the operator’s acquisition by a strategic buyer.

To address these concerns, Orange has offered to secure the sale of TKR’s holding in TRMC to OTE and will not implement the transaction until TKR and OTE have reached a binding agreement on the divestment, the EC has approved the agreement, and the stake has been transferred to OTE.

In November 2020 Orange Romania signed a deal to buy the 54% stake for a price of EUR268 million (USD317 million), subject to ex-post adjustments, giving the Romanian company an enterprise value of EUR497 million.